Marketing review

06 Sep 2007


Future Group gets going with its smaller retail format
Kishore Biyani''s Future Group is working on a new retail format, aimed at boosting online sales in the festive shopping run-up to Diwali.

The Group plans to launch half a dozen small stores sized at 150 sq ft in Mumbai, hosting 40-inch digital screens for customers to use to browse through the entire range of products. Using online screens, consumers would be able to get a feel of the company''s entire range of products.

Personnel manning the store will personally welcome customers and also help them browse through relevant sections based on their preferences. Customers will also have the option of placing an order then and there, with the product being home-delivered within a few hours.

Aimed at leveraging consumers who are not very internet-savvy, the in-store online format would help them save travel time to hypermarkets or malls at distant locations.

These stores are likely to be up and running in about two months, with the exact suburban locations to be announced soon.

Commentators opine that this format could result in a shrinking of real estate costs, as floor space needed for retailing is much lower than other retail formats, along with cost benefits coming from optimised inventory management. In most cases, products could be shipped directly from manufacturers, eliminating inventory altogether.

Time and overhead cost saves are also facilitated by the online order mechanism, which facilitates instant communication of the order to manufactures, for onward delivery to the customer.

According to an Internet & Mobile Association of India (IAMAI) survey, leading categories for online buying are books and electronic gadgets, followed closely by apparel accessories, gifts, and computers.

According to industry experts, with organised retail getting bigger, e-commerce will soon become an integral part of business strategies, and will form a significant part of the overall format mix for retailers.

A Mercedes-Benz as public transport? Not entirely unthinkable
DaimlerChrysler, maker of the Mercedes-Benz and the world''s biggest commercial vehicle manufacturer has, unveiled plans to launch Mercedes-Benz buses in India by early 2008.

The German auto giant is reportedly looking at collaborating with Sutlej Motors, Punjab-based bus body maker to bodies built on the Mercedes-Benz chassis manufactured by DaimlerChrysler India.

The venture is said to encompass the development, production, marketing, sales and after sales services for rear-engine luxury coaches. DaimlerChrysler will handle the sales and after-sales of these coaches.

The premium end of the bus market in the country is still in its nascent stage, with market leader Volvo selling under 600 units annually. However, rising per capita incomes and a better road and highway network have fuelled demand for luxury highway transport, and the segment is set to heat up soon.

Consumers have already started to demand more comfort and convenience from bus travel, and the pressure is on the manufacturer to provide products with higher safety and environmental standards.

Sutlej Motors is a manufacturer of coaches, buses and application vehicles, manufacturing luxury, inter-urban, long-distance, and modern low-floor city buses. The company also makes low-floor buses for use at airports, along with mini buses.

DaimlerChrysler''s green-field unit is scheduled to be ready around 2009. Industry sources indicate that the initial roll out of these buses could well happen out of Sutlej''s manufacturing unit, citing that Volvo has a similar tie-up with Jaico to manufacture 1,000 bus bodies, and Tata Motors has an alliance with Brazilian Marco Polo.

The business of people: Temps in Retail too
"Temping", or the hiring of temporary staff to tide over the 30-40 per cent surge in footfalls during weekend or festive shopping seasons is on the rise.

The temping business has gained prominence in recent years, with modern business such as call centres and data processing set ups regularly hiring temps. Getting temp staff provides businesses with greater flexibility of hiring at short notice, minus the hassle of beefing up their payroll. Typically, undergraduates, and even homemakers fit the profile for temps, making a quick buck in the process.

In more organised temping, the temps get all social security benefits, which are managed by an HR company who places them at other businesses.

So, at a marginal difference in salary costs, retailers and other business hiring temps gain a he advantage in not devoting managerial time to non-core activities.

In retail, temps are typically part of three categories - frontline temps managing counter jobs, merchandising temps who have some previous retail experience, and a third group typically hired by speciality retailers.

Companies such as Ma Foi and Team Lease form the organised temping market. Ma Foi is said to have 30,000 temps, with Team Lease claiming to be the largest temporary staffing company in the country with 70,000 people on the rolls.

Temps so far have been utilised typically on back-end activities like laying out stores, inventory movement, etc. Going forward, the focus is likely to shift towards manpower optimisation, which will see them manning frontline jobs as well.

Staffing company Kelly Services has been reportedly approached by retail chains Subiskha and Vishal Retail, among others, for weekend staff. The Future Group apparently prefers not to use temps, instead staggering its existing work force according to its needs.

"The Complete Man" to be accompanied by "The Complete Woman" from Raymond
New Delhi:
Completing its tag line, "The Complete Man", Raymond announced its foray into the Rs800-crore women''s western wear market, with the launch of ColorPlus Women.

Over the next three years, ColorPlus Women will reatil through 175 points of sale. The range will comprise day wear, sports wear, business wear and formal wear, and is targeted at the upper middle and premium class.

Ranging between price points of Rs900 and Rs1,900, the line will be available at ColorPlus flagship stores in multi-brand outlets, as also in large format stores across the country.

Additionally, Raymond has plans to open five exclusive ColorPlus Women stores, plus 12 lifestyle stores that will feature the new range, by end 2007. ColorPlus Women will be launched initially in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Pune and Ahmedabad.

With the market growing at a healthy 20 per cent, the company plans to achieve a turnover of Rs150 crore over the next two years from the new women''s range.

Ad major JWT ties up with Mindset in Hyderabad
Advertising agency JWT has set up a presence in Hyderabad through a partnership with Mindset e.y.w Advertising Pvt Ltd.

In a press release, JWT CEO Colvyn Harris said, "We were planning to set up a new office to add to our network and found Mindset to be the right partner and Hyderabad the city to be in".

JWT has Microsoft in Hyderabad as among its major clients. Other well known names in its client list include ITC, Unilever, Godrej, Tata Steel, Hero Honda, and Reliance Capital.

JWT''s resources and expertise will help Mindset to offer clients a whole new level of advertising and brand building to its clients in Hyderabad.

JWT has 315 offices worldwide.

Siyaram Poddar group unveils aggressive plans for Oxemberg, other retail brands
The Siyaram Poddar group has unveiled plans to focus on marketing its garment brands, with particular emphasis on its flagship Oxemberg brand.

Oxemberg garments added Rs64 crore to the Rs1,500-crore turnover of the group during the last financial year and the company now plans to roll out an aggressive television campaign.

The textile and ready-made business is sailing through a patch where brand loyalty ranks low, and most brands are vying for shelf space in malls and large format stores, along with mind space through advertising and promotions.

Oxemberg is present in Central, Future Groups'' large format store and Siyaram is said to be in talks with In-orbit and other malls to get acquire retail space. According to sources, the brand plans to set up 100 retail outlets by the end of 2008, across 40 tier-II and tier-III cities. Special focus will be accorded to the south Indian market and new outlets will be located in malls and high street locations.

The company currently has 33 outlets in 10 cities.

The estimated outlay for each outlet will come to about Rs30 lakh on lease rentals, and Rs50 lakh to Rs1.25 crore on outright purchase deals. The stores will carry inventory worth Rs10-12 lakh.

The company is evaluating the adoption of a cluster approach, and plans to roll out standalone stores wherever viable. Post expansion, the Rs65-crore brand is looking at revenues of up to Rs100 crore.

Hindustan Unilever to set up ''hairwash domes'' to promote Dove
Having secured a one per cent value share over the three month period since its launch, Hindustan Unilever Ltd (HUL) is now set to take its Dove haircare brand to malls and beauty parlours.

The company has also allocated part of its promotion and advertising budget on the internet and mobile platforms to further increase awareness about the brand.

The company is planning to target 12 - 13 malls across metros by setting up ''hairwash domes'', where consumers can come in for a free hairwash experience.

Some of these consumers would have the option of getting themselves photographed by professional photographers, and have their photographs displayed at a hair exhibition to be organised by the company under the tag ''Dove beautiful hair gallery''.

To evaluate consumer concerns and perceptions about their hair, HUL is surveying women consumers on how they feel about their hair, and whether they are really happy with it.

The hairwash experience would be provided to consumers who have been unhappy with their hair. The Dove photo-gallery exhibition is to be the culmination of HUL''s concept of ''Real Women, Real Beauty'', with Dove showcasing pictures of real women.

Dove is being positioned as a wellness brand; differentiated form HUL''s other beauty hair care brands such as Sunsilk and Clinic. The company plans to leverage the brand to create a new segment in hair care, with the new treatments available under the Dove brand in conditioning and nourishment.

Given the price and product overlaps with other hair care brands, HUL wants to build Dove on the wellness platform, expanding on the equity of its soap brand under the same name.

M&M might sell Nissan''s small cars
New Delhi:
Mahindra & Mahindra (M&M) just might be the one to market small cars, without having to manufacture them.

Industry sources suggest M&M is in the advanced stages of negotiations, which would see the forging of a marketing tie-up with Nissan Motor Company for its small cars.

Nissan has earlier made public that it has plans to enter the Indian car market with some of its existing small cars. That announcement had not indicated how its products would be marketed.

The company has a marketing arm in the country, which sells its SUV, the ''X-Trail'', and ''Teana'', but industry sources opine that the company may not have adequate infrastructure and reach to cope with the demands of small car distribution.

Reportedly, M&M too may be keen to establish a marketing joint venture with Nissan, similar to the one it has with Nissan''s sister company, Renault. That tie-up has put M&M in the car segment in India, with the Renault Logan. M&M holds the majority stake in Mahindra Renault India.

M&M and Nissan, along with Renault, are equity partners in a manufacturing project at Chennai. Nissan plans to eventually manufacture its small cars in India, leveraging M&M''s widespread M&M dealer network to market their products. The Renault Logan is already being sold across the country via the existing M&M dealer network.

The Chennai project has M&M holding 50 per cent equity, with the remaining resting with the Nissan-Renault combine.

The plant would have an installed capacity of four lakh vehicles per year, and is reportedly facing a delay in its 2009 launch plans.

Pantaloon partners US chain Coffee Bean & Tea Leaf
Pantaloon Retail India Ltd has entered into a franchise agreement with the US chain The Coffee Bean & Tea Leaf.

The joint venture will see a the formation of a privately held speciality chain, with Blue Foods, Pantaloon''s joint venture company, being the master franchise.

The deal could see the set-up of another coffee chain, similar to Lavazza Group''s Barista, Whitbread Costa Coffee and Cafe Coffee Day, which have seen robust growth driven by modern retail formats, and higher disposable incomes.

Earlier reported to be keen on a franchise deal with coffee chain Starbucks, newspapers report that the deal was scuttled after India''s foreign investment board (FIPB) rejected the application citing an unclear equity structure.

VH1 joins TheOneAlliance
New Delhi:
TheOneAlliance distribution joint venture of SET India and Discovery Communications, has brought into its fold popular international music channel VH1, which is a sibling of MTV.

VH1''s agreement with Zee-Turner''s distribution ended in August 2007, following which it has decided to move in with its siblings MTV and Nick, which are already part of TheOneAlliance.

The joint venture, SET Discovery Private Ltd, has SET India and Discovery Communications as partners since April 2002. The company presently distributes 15 channels under TheOneAlliance brand to over 61 million homes across 4,000 cities and towns in India.

VH1 has a viewership of approximately 20 million households in the country.

Other channels that are part of TheOneAlliance include Sony Entertainment Television, SET Max, SAB, SET Pix, AXN, Animax, Discovery, Discovery Travel & Living, MTV, Animal Planet, NDTV 24X7, NDTV India, NDTV Profit, Nick and Ten Sports.

Big 92.7FM plans to syndicate its content to Asian FM in the US
Seeking to address the ''home'' radio station need for the PIO (People of Indian Origin) community in the US, Big 92.7FM is looking at syndicating content to a US based radio station, Asian FM, which has a listener base catering to the South Asian community out there. This could also prove to be an interesting alternative source of revenue for the station.

Asian FM claims to be the only provider of 24 hour programming of Asian music, and wants to include the large Indian community into its listener base, for which it finds content from Big92.7 FM ideally suited.

As part of the agreement, Big FM would provide mainly non-music content to Asian FM, which would include but not be limited to humour, romance, and health, which reflects the contemporary flavour of India.

Big92.7 FM expects this to be a huge hit with the large Indian and Pakistani communities of the US, anticipating that people of these communities in the US want to hear a lot more of India, be it humour, devotion, television or Bollywood-related trivia.

With this initiative, Big92.7 FM is seeking seeks to replicate the international non-traditional revenue model, which contributes between 30 to 40 per cent of a station''s revenue. Typically, content syndication, events and other on-ground activities for part of these revenue sources.

With this one of a kind deal almost in place, Big92.7 FM is reportedly seeking similar associations in other markets as West Asia, Europe, Africa and Southeast Asia.

Launched in 2003, Asian FM is a 24-hour radio station, broadcasting different kinds of Indian music that ranges from Bollywood chart toppers to devotional songs, in addition to local, national and international news, and also covers cricket.

Asian FM now plans to adopt a language specific programming format, with programming in Urdu, Gujarati, Punjabi and Bengali. It reaches the South Asian/PIO population across 5 regions: Long Island (NY), Atlanta (GA), Houston (TX), Detroit (MI), and Chicago (IL).

After its February 2007 launch of Asian FM USA, a subscriber-based radio channel on Dish Network (Echostar), Asian FM is available across all of the United States via the satellite service. These two radio networks are the first Indian-owned networks in the U.S.

Kingfisher F1: Marketing, The Vijay Mallya way
Since UB Group''s acquisition Scottish distiller Whyte & Mackay, a move which elevated the group to second place in the global spirits market, chairman Vijay Mallya has most definitely been looking to overtake something and ensure that he is the first to cross the line with the chequered flag.

Spyker Ferrari is most likely what it is. Mallya has decided to get himself a Formula One team, happily investing a cool €90 million over a weekend, and in the process, exponentially expanding marketing opportunities for his flagship brand, Kingfisher.

Given his love for fast cars, racehorses, parties, and his trademark flamboyance, a personal F1 team fits like a glove with the rest of Mallya''s portfolio.

Mallya estimates that Spyker could pull in €25 million in television revenues next year, and plans to cut costs for the loss making endeavour by relocating some of the research capabilities to India. An Indian team, ideally with an Indian driver - is an almost sureshot route to unlocking untapped marketing potential in a country where half the 1.1 billion population is under the age of 25, a substantial chunk of which keenly follows F1.

TV ratings are set to skyrocket, with potentially every Indian kid tuning into F1, given their ownership in it as a country. If even half of the cricket mania is replicable here, Kingfisher is most definitely home and dry.

However, as Kingsher presently adorns Toyota''s team as part of a $5-million deal ending next year, it could be some time before Spyker wears the Kingfisher shade of red. In the interim, other UB group brands could possibly find themselves on the team.

As any flyer on Kingfisher airlines would testify, having viewed Vijay Mallya''s personal ''welcome aboard'' address on the aircraft''s in-flight entertainment system, Mallya is all about building brands. The F1 acquisition presented a value-creation opportunity that he possibly couldn''t pass up.

Undoubtedly, Indians can expect some style, flamboyance, and pizzazz from Mallya''s latest personal endeavour, and of course, can also be sure that he will most definitely make some money off it as well.

Italian fashion sportswear brand Kappa launched in Bangalore
The Italian fashion sportswear brand Kappa, opened its first store in India in Bangalore earlier this week, accompanied by a theme launch branded, "Do the Kappa", which attracted several personalities from the mini metro.

Leading Bangalore-based personalities including badminton icon, Prakash Padukone, photographer Waseem Khan and model, designer and entrepreneur Mariam Handa, radio jockeys Chaitanya Hegde and Sheetal Iyer, marathoner Gul Mohammed, Asian Championship medalist and Arjuna Awardee Reeth Abraham, fitness evangelists Shardul and Satya Sinha, and consultant Harish Bijoor with wife Nina.

The brand roped-in Bangalore''s who''s-who to recreate the unique 40-year old logo, which is showcased as a ''Do the Kappa'' wall at the Kappa store, created with pictures of these celebrities, and unveiled by Fazle A Naqvi, executive director, LMG Brands India (P) Ltd.

Kappa is recognised across the world thanks to its unmistakable ''Omini'' logo. Forty years ago, a photographer during a shoot realised that he had more than just a pretty picture - a shot of a young man and woman sitting back-to-back, which formed the genesis of Kappa''s Omini logo.

Commenting on this occasion, Naqvi said, "The idea of recreating the Omini logo, 40 years after its birth, was an idea that excited all of us at the Kappa team. The underlying thought was to create a unique ''connect'' with our patrons and engage them with the brand in an innovative manner. We are delighted at the support extended by Bangalore''s leading personalities and are confident that our youthful consumers will be eager to ''Do the Kappa.''

Internationally, Kappa sponsors various sports disciplines of national football and golf teams, several top-level club sides in rugby, cycling, yachting and motor sports. Most recently, Kappa has become the official apparel partner of the Indian Rugby team.

Paramount Airways plans on going west
Paramount Airways is considering expanding into the western region through an acquisition, if the right opportunity presents itself.

According to M Thiagarajan, managing director, Paramount Airways, discussions with other airlines to evaluate a possible acquisition are in progress. He also said that in addition to inorganic expansion opportunities, Paramount Airways is also growing organically, and currently claims to control a 26-per cent market share in South India.

It plans to expand to the Western region by next year and into the northern region by 2009, with a pan-India presence by 2011.

The company has signed a memorandum of understanding (MoU) with aircraft manufacturer Embraer for procuring around 40 aircraft. Embraer is a leading player in the regional jets category.

Infiniti Retail Ltd''s Croma gears up for festive-sesaon sales
Croma, the Tata Group''s chain of electronic and consumer durables outlets, is experimenting with mailing product catalogues containing information on ''deals'' and best buys to potential customers.

Infiniti Retail Ltd, the owner of the Croma brand, is a 100 per cent subsidiary of Tata Sons. It has partnered with Australian retail major Woolsworths Ltd to source all the products.

Starting September, the new initiative, obviously directed at the festive-buying wave that gathers momentum as a run-up to the Diwali season, will be rolled out in Mumbai, Pune and Ahmedabad, according to CEO and managing director of Infiniti Retail Ltd., Ajit Joshi.

Croma''s first store in Pune was inaugurated at Ishanya mall, off the Airport road. Joshi said around 70,000 such catalogues are being mailed out across Pune alone, and a second store in Pune is to be launched later at the Krome mall on Solapar Road. This will take the tally of Croma stores in India to eight.

The company plans to roll out 40 stores, which typically cover an area ranging from 10,000 to 20,000 sq ft each, by the end of March 2008, and plans to have 100 stores in Delhi, Bangalore, Hyderabad, Baroda, Chennai, Surat, Mumbai, New Mumbai, Ahmedabad, Nashik and Pune with locations at high streets or malls, by March 2010.

Croma outlets stock 6,000 products comprising 180 national and international brands under eight categories, viz. home entertainment, small appliances, white goods, computers and peripherals, communication, music, imaging and gaming.

TVS forays into three-wheeler segment; rolls out 7 vehicles
TVS Motor Company has launched seven vehicles. Marking its foray into the three-wheeler segment, the new launches include three variants of its new three-wheeler.

The products are expected to be available across the Indian market in a phased manner between October and November this year. Prices will be announced prior to the launch.

The launch function was branded Dhoom 7, and was held in its Rs125-crore new three-wheeler plant at Hosur. Company chairman and managing director Venu Srinivasan announced that the fourth quarter of this fiscal would see a changed TVS with many more aggressive and focused products, and will be marked by a change in the company''s fortunes.

Rising marketing and input costs had impacted the company''s bottom-line last fiscal. The company estimates the automobile industry''s continued growth at 12 per cent per annum, given the economy''s growth at about 9 per cent. Srinivasan said that the company has been spending about 3 per cent of sales on R&D efforts, and results would be evident in the new vehicles that would sport new technology features developed in-house.

The company''s three variants of its new three-wheeler include petrol, CNG and LPG versions, sporting two-stroke engines that comply with the emission and noise norms. TVS is working on a four-stroke engine platform, to be launched in about a year. 90 per cent of the market for passenger three-wheelers is polarised in four southern states plus Gujarat, Maharashtra, and Delhi.

TVS also rolled out a new 125cc bike christened ''Flame'', which is a variant of the StaR City. It also launched an electric variant of Scooty Teenz and the Apache RTR 160 FI in the performance bikes category with electronic fuel injection.

The Flame and the new Apache EFI 160 will serve as technology showcases for TVS. The Flame reportedly sports the country''s first three-valve CC VTi (controlled combustion variable timing intelligent) engine, developed in collaboration with AVL of Austria. TVS expects to manufacture about 35,000 units a year.

For the new variant, the Apache RTR 160 has been upgraded to include electronic fuel injection. The EFI technology has enabled TVS to boost peak power of this recently launched bike. The company did not disclose the price differential between the existing and new version, but market sources estimate the differential to be around Rs5,000.

The Scooty Teenz electric vehicle has been built on the same platform as its earlier two-stroke version. The EV sports an imported electric motor, and is expected to be capable of a top speed of 40 kph, with a maximum range of 50 km on a single charge.

LG eyes 10 per cent share of the GSM market by 2008
New Delhi:
Aimed at cornering a 10-per cent share of the GSM market by 2008, LG Electronics India, the Indian arm of the South Korean electronics giant LG, has unveiled future plans for its mobile business in India, saying that it would target GSM rather than CDMA, as the latter had seen an erosion of its market share due a market inundated with Chinese products.

Additionally, the company plans to use India as an export hub for Middle East and Africa in GSM category.

According to managing director and president, South West Asia, Moon B Shin, the company does not think that CDMA is a profitable option in India. In recent months, the company has witnessed shrinking profitability due to low-cost Chinese models.

The company sees GSM as the future growth engine for India, and is looking at being one of the top three players in domestic market. It has put in place a strategy to take on number one Nokia.

LG wants to increase its GSM market share from the current 1.4 per cent to 8-10 per cent by 2008, driven by product leadership, an enhanced distribution network and after-sales support, and a range of new models in the premium segment. On Thursday, LG launched two new premium GSM handsets, which are part of its ''black label'' series. The models are called LG Shine, a sliding handset priced at Rs15,999, and the LG Shine bar phone priced at Rs8,999.

Expansion of its Pune-based production unit is also on the anvil, with plans to make it serve India as well as Middle East and African markets by producing locally. Till now, the company has invested $60 million in the Pune factory, with more coming in future years to add a minimum of two production lines every year. The company envisions it to be a strategic facility three or four years down the line, with a 1-million handset capacity per annum.

Elaborating on the decreasing profitability of its CDMA offerings, Moon said LG India''s turnover for CDMA phones in 2005 was at $300 million, which declined to $250 million last year. This year, it is expected slide further to about $150 million. In volume terms, LG sold 9 million CDMA handsets and 1.2 million GSM handsets in India last year. CDMA sales are foreseen to decline further to 6-7 million, while GSM handsets would grow to over two million handsets this year.

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